During a recent appearance at the Covid inquiry on the economic response to the crisis, Rishi Sunak, the former Chancellor of the Exchequer, emphasized the critical importance of the Covid loan scheme in averting a potential business catastrophe in Britain. Sunak underscored the necessity of swift and extensive action to prevent widespread business failures and job losses during the pandemic period.
Reflecting on the gravity of the situation faced by businesses, Sunak highlighted the severe cash flow challenges encountered by many small and medium-sized enterprises, with a significant portion having less than a month’s worth of funds available. He stressed the urgency of providing financial support on a large scale to mitigate the risk of mass insolvencies and job cuts.
Addressing concerns about the Bounce Back Loan Scheme, which has faced criticism for susceptibility to fraud, Sunak defended the decision-making process behind its implementation. He stated that despite acknowledging the risks associated with potential fraud, the government prioritized the urgent need for financial assistance over extensive checks and safeguards.
Sunak affirmed that given the circumstances at the time, he would make the same choices again regarding the establishment of the loan scheme. He reiterated the challenges faced during the crisis, emphasizing the necessity of rapid deployment of financial aid to businesses facing imminent financial distress.
The former Chancellor emphasized the government’s awareness of the fraud risks involved, asserting that the decision to proceed with the scheme was based on the assessment that the benefits outweighed the potential drawbacks.